Just How Valuable Is Family Caregiving?

A welcome recognition of the value of family caregiving came in a recent report by the Congressional Budget Office (CBO), which estimated the economic value of caregiving for older persons in 2011 to be $234 billion. This estimate vastly exceeds the total amount of paid care from all sources (Medicaid, Medicare, private pay and others) for both institutional care ($134 billion) and home and community-based services ($58 billion).

The AARP Public Policy Institute has made similar estimates of family caregiving in its Valuing the Invaluable series, the most recent estimating the total value to be $450 billion in 2009. Both the CBO and AARP estimates are very large, but some readers have asked why the estimates are so different. The most obvious difference is that CBO restricted its estimate to care recipients age 65 or older, while the AARP estimate is for caregiving to all adults age 18 and older. (About one-third of adult care recipients are younger than 65.) Other differences include:

The CBO estimate uses an hourly economic value of $21, the cost of hiring a home health aide. The AARP uses a much lower estimate of $11.16 per hour, which is a weighted average of the costs of a home health aide, a personal care aide and the state minimum wage.

The CBO estimate is based on a survey of care recipients, while the AARP estimate is based on a survey of caregivers. Care recipients likely underreport hours, as they may not be aware of assistance that is not “face time” (such as shopping or financial management where the care recipient need not be present).

The sources of data for the CBO estimate have a more restrictive disability screen than data sources for the AARP estimate and thus exclude some types of assistance.

The main motivation when we prepared the originalValuing the Invaluable report in 2006 was to reconcile widely varying estimates of the number of caregivers. We examined five sources that used direct surveys of caregivers. The number of caregivers reported from these five sources was 12 million to 44 million, but after adjusting for the caregiver definition and to the year 2006, the range of the estimates compressed to 26 million to 39 million.

Even after standardizing definitions, estimates of the economic value of caregiving can vary widely. The original Valuing the Invaluable report estimated an economic value of $354 billion in 2006, but we also showed that reasonable assumptions could place that value anywhere between $167 billion and $780 billion, with most of the variation due to decisions regarding the value per hour.

Reasonable estimates can vary, but the main finding from the CBO and AARP estimates is clear. The magnitude of family caregiving dwarfs other public and private costs associated with providing long-term services and supports to people with disabilities of all ages. Public policies should recognize these contributions and provide greater support for the backbone of our nation’s long-term services and supports system – family caregivers.

—Â Ari Houser, AARP Public Policy Institute

Â Â Ari Houser is a senior methods adviser for the AARP Public Policy Institute. His work focuses on measurement and analysis of demographics, disability, and long-term services and supports system performance.